Maruti Suzuki Q1 preview: PAT may soar up to 300% YoY on low base

Maruti Suzuki Q1 Preview: India's biggest domestic car manufacturer, Maruti Suzuki India, is all set to report its April-June quarter (Q1FY23) result on Wednesday, July 27. Brokerages expect the passenger vehicle maker to report net profit growth between 200 per cent and 300 per cent on a low base of last year, while revenue could rise up to 46 per cent year-on-year (YoY).

Ebit margin, analysts said, may be impacted sequentially due to higher discounts, higher raw material (RM) cost, and operating deleverage, even as it may expand over 400 basis points YoY.

"Revenue is expected to grow by 46.1 per cent YoY at Rs 25,964 crore, led by low base and increase in average realisation. The average realisation is expected due to price hikes taken by the company over the last one year," said analysts at Sharekhan in an earnings preview report.

Analysts would look out for guidance on industry demand outlook, both rural and urban, and if there is any visible impact of the current inflationary pressure; normalcy in supply constraints; when would the benefit of softening input costs start reflecting in financials; any impact of possible US recession, rising operational costs in Europe, and economic outlook in some emerging economies like Africa.

On the bourses, stock of the company surged 12 per cent during the quarter under review as against a 9.4 per cent fall in the benchmark S&P BSE Sensex, ACE Equity data show.

Here's what brokerages expect.

Equirus Research

Expects volume de-growth of 4 per cent QoQ, but up 32 per cent YoY, mainly impacted by chip shortage issues. Blended realisations, they said, are likely to remain flat sequentially, and bakes in margins decrease of 91 bps QoQ to 8.2 per cent given the decrease in gross margins due to higher RM cost, and negative operating leverage.

It pegs revenue at Rs 25,533 crore, up 44 per cent over Rs 17,771 crore reported in Q1FY22. Sequentially, it could fall 4.5 per cent from revenue of Rs 26,740 crore clocked in Q4FY22.

Ebitda and net profit, meanwhile, are pegged at Rs 2,086 crore and Rs 1,463.9 crore, up 154 per cent and 232 per cent YoY, respectively.

Motilal Oswal Financial Services

The brokerage has pegged Maruti Suzuki's sales at 467,900 units during the recently concluded quarter, up around 32.3 per cent over last year's sales of 353,600 units. Average realisation is seen at Rs 549,958 per car, up 9 per cent YoY.

The brokerage expects revenue to grow 45 per cent YoY to Rs 25,734 crore, while Ebitda is seen at Rs 1,925.3 crore. Meanwhile, net profit could zoom 160 per cent to Rs 1,141.4 crore, up from Rs 441 crore last year, but down from Rs 1,838.9 crore QoQ.

Sharekhan

It estimates Ebitda margin contraction of 30 bps QoQ to 8.8 per cent, led by rise in raw material costs. Driven by low base, net profit is expected to increase by 270 per cent YoY to Rs 1,632 crore.

HDFC Securities

The brokerage believes Maruti Suzuki's margins may remain flat sequentially as impact of high RM is expected to be offset by lower discounts and depreciating yen. It anticipates revenue at Rs 26,054 crore; Ebitda margin at 9.4 per cent; and PAT at Rs 1,771.4 crore (up 302 per cent YoY).

Reliance Securities

Total volume, the brokerage said, could grow by 32 per cent YoY (down 4 per cent QoQ), with average realisation improving 12 per cent YoY (up 2 per cent QoQ) due to a better product-mix and price hikes.